Berachain Halts Network Following Balancer V2 Exploit

Key Takeaways

• Berachain validators halted the network after a vulnerability tied to the Balancer V2 exploit.
• The team is performing an emergency hard fork to secure affected funds and restore normal operations.
• The exploit affected BEX, Berachain’s largest DEX, with about $50 million in tokens involved.

Emergency Halt to Protect User Funds

Berachain validators decided to stop the network after discovering a vulnerability linked to the Balancer V2 exploit. The issue affected BEX, Berachain’s biggest decentralized exchange, which holds over $50 million in tokens. The Berachain Foundation confirmed that the halt was intentional. It was done to allow developers to carry out an emergency hard fork to fix the exploit and recover affected funds.

The team announced on X that the network would return once the recovery process was complete. The halt was not a malfunction but a safety measure to protect users’ assets.

What Caused the Problem

The vulnerability comes from the same Balancer vault access control flaw that earlier allowed attackers to drain more than $100 million from Ethereum’s DeFi ecosystem. The Balancer exploit involved several liquidity pools and affected tokens like ethena and honey through complex smart contract interactions.

Since the issue affected multiple non-native tokens, not just Berachain’s own token (BERA), solving it required a deeper fix than a simple rollback. The hard fork will focus on isolating compromised contracts and restoring affected funds. Developers said the process might include a rollback or rollfront depending on what ensures the safest outcome.

Berachain’s co-founder, Smokey The Bera, said that about $12 million in user funds were at risk. The validators’ quick decision to coordinate the halt came from a need to protect those funds. He acknowledged that some community members might see the decision as controversial. Still, he emphasized that protecting users takes priority over maintaining full decentralization in moments like this.

The statement highlighted that Berachain does not yet have the same level of decentralization as Ethereum. That means validators can coordinate more directly in emergencies. While this may concern some, it also allows faster reactions to major threats.

Source: X

Broader Effects on the DeFi Space

The Balancer exploit did not only affect Berachain. Other DeFi projects, including Beets Finance, confirmed similar breaches in their v2 pools. The incident sent shockwaves through the market. Balancer’s BAL token dropped about 8% within an hour, while Berachain’s BERA token fell roughly 6%.

These price movements reflect shaken confidence across the DeFi community. Many projects that use or fork Balancer’s code are now checking for the same security flaw.

The Berachain team is now focusing on completing the emergency hard fork and recovering all compromised assets. Once secured, the network will restart. The event shows how fast coordination between validators and developers can protect a network in a crisis.

Still, the situation raises questions about risk management in crypto projects built on shared codebases. It also highlights how a single vulnerability can ripple through interconnected DeFi systems.

As Berachain works to bring its network back online, users are waiting for updates on fund recovery and future security improvements. The team said operations would resume soon after confirming all affected funds are safe.

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